1. Flipping of Prime Properties
There are lots of prime properties in prime places which come up for sale. These are properties very ideal for resale. Many times the owners will be in a hurry to sell the property for various reasons which could be financial reasons, personal reasons, family reasons, or relocation to another part of the country or world. It could be a resale of a Villa, Flat or an independent bungalow, etc.
The secret to success here is “Immediate Settlement”. Here the main advantage is that the risk factors are very very minimal as the property is already in existence with legally clear titles & documents. Moreover, these kinds of properties are ready-to-move-in types. The entire cycle should not take more than 3 months’ time from beginning to finish since it is not only a resale of a Ready-to-Move in property but also an existing property
Flipping or Reselling of prime properties can be very more lucrative for several reasons:
1. Market appreciation:
Over time, the value of properties tends to increase due to various factors such as inflation, development, and economic growth. If a property is purchased at a lower price and then resold at a higher price after a few months, we can make a handsome profit from the appreciation in value.
2. Renovations and improvements:
Reselling properties after making significant renovations and improvements is very profitable. Upgrading a property can increase its value and appeal to potential buyers, allowing us to sell for a higher price than what we initially purchased it for.
3. Strategic location:
Properties located in strategic locations, can increase in value significantly over time due to demand. It makes sense to buy a property in a good location and then sell it for a higher price.
4. Timing:
Timing is crucial when it comes to reselling properties. If a property is purchased during a market downturn and then sold during a market upswing, we can make a significant profit.
In summary, Flipping or reselling prime properties can be very lucrative due to the potential for market appreciation, renovations and improvements, strategic location, and timing.
2. Flipping of “Stressed Properties”
There are many properties in various prime locations of the city which become NPA Non-Performing Assets by the Bank’s definition. These are nothing but stressed properties. There are many interesting Properties, which get auctioned by various Banks & Financial Institutions for default & non-payment of dues by the borrowers. If a borrower defaults on his monthly EMI payments then the lending institutions be it a Bank or NBFC or any other financial institution would seize the property & puts it in the auction.
The resale of stressed properties is very much lucrative since these stressed assets can be acquired for prices much lower than the market value prevailing in that particular location. The main advantage of dealing with the sale of stressed assets is that the properties will be clear titled with no encumbrances (except with the lending institutions), and with no litigations as the legality & all documents would have been already thoroughly scrutinized by the lending institutions before lending any money to the borrowers. Moreover, these properties will be in prime locations or else no lending institution would touch them.
There are two ways of acquiring these NPA-stressed assets. One is by participating in the bank’s auctions and another one is by approaching the owners directly who would be very keen to sell them & get rid of all legal problems. There are regular advertisements that keep appearing in the newspapers announcing the auction of the sale of stressed assets and the sale of NPA assets.
The owners will be too very willing to deal with the buyers directly & settle the matter at the earliest at a price much lower than the market price because they know very well, that if their properties are auctioned, they would get a very raw deal or a cruel deal both from the bankers & public.
Every bank & every financial institution will have a long list of NPAs & they are too very willing to share with anybody who can help them to liquidate these NPAs. Even if we approach the banks & financial institutions directly, we can get a long list of NPA properties.
3. Flipping after “Re-Modelling”
In all our urban cities like Bangalore for example, a new kind of scenario has emerged & is set to become a future trend. The concept of Joint Undivided Families, which was happily existing hitherto is slowly fading away. This is slowly making way for many small disintegrated families.
The undivided families are getting disintegrated because of so many reasons like
- The sons, after marriage are no more living with their parents like in good old days, due to so many reasons. They prefer to stay separately.
- In some cases, the Joint Undivided Families gets disintegrated soon after the demise of their old parents.
- Daughters after getting married are moving out as usual
- Sons/children move out of town & get relocated to different parts of the country as part of their work by way of transfers & postings.
- Sons/children go out of the Country itself in search of greener pastures like the USA, UK, Australia, etc
As a result of this, the aged parents are simply left to fend for themselves in big houses & bungalows. They are all alone, literally at the mercy of maids & other servants, very often proving to be very dangerous & fatal, as we often read in the newspapers & television.
So these old people would be wanting to sell their big old houses/bungalows & prefer to stay in smaller houses or flats, which are self-sufficient & more secure. And all these old houses will be situated in centrally located posh areas with very clear titles & documents.
But these big houses do not sell easily, even though they are situated in centrally located Posh areas with very clear titles & documents – simply because they are too big & there are no more big undivided families anymore to buy them out since the need of the hour is only a 2/3 bedroom apartment.
There are many such good properties getting released into the market in the city today waiting endlessly for buyers. These kinds of properties can be converted into very good Business opportunities, provided they are handled slightly differently.
Make the single big house into many small comfortable 2/3 bedroom units by suitably modifying/altering/adding/changing the building design. By this methodology, many single big bungalows with 3 floors can be converted into 3-4 independent units.
The Advantages
- The Risk factors are very very minimal as the Property already exists in centrally located posh areas with very clear titles & documents.
- No fresh plan sanction is required from the local municipalities, as the changes are internal only. In case of additional floors are to be put in, the fresh sanction can be easily obtained from the local municipal authorities like the BBMP, as the titles will be very clear, with all the latest tax payments, Khatha, etc.
- No fresh permissions are required for Power/Water/sanitary from agencies like BESCOM or the BWSSB. There could be an additional requirement for Power/ meters, which can easily be obtained.
- This is a very short-term project, not taking more than 3-6 months at the maximum.
Flipping of properties after remodelling can be lucrative for several reasons:
1. Increased market appeal:
Remodelling a property can make it more attractive to potential buyers, leading to increased demand and potentially higher selling prices.
2. Increased value:
Remodelling can also increase the value of a property by improving its functionality, aesthetics, and energy efficiency. This can result in higher appraisals, allowing us to sell the property for a higher price.
3. Competitive advantage:
A remodelled property can also give us a competitive advantage in a crowded market. It can make the property stand out from similar properties, potentially leading to faster sales and higher offers.
4. Personalization:
Remodelling a property can also allow us to personalize the property to the taste and preferences of a buyer, making it a unique and desirable property in the eyes of potential buyers.
5. Return on investment:
Remodelling a property can be a significant investment, but it can also provide a high return on investment (ROI). By carefully planning and budgeting for the remodel, we can ensure very lucrative profits in a very short span of time.
Flipping or Reselling properties after remodelling can be lucrative due to the increased market appeal, increased value, competitive advantage, personalisation, and potential for a high ROI.
4. Flipping of Properties by acquiring “Marketing Rights”
The secret to success in the field of real estate is the “withholding” power purely in terms of money. Barring the big-time builders who have the financial muscle power to withhold, the smaller builders would not be in a position to withstand the delays in selling, especially after the near completion of their projects.
These kinds of projects are very lucrative for flipping / resale. If we pump in say 50% of the project cost to the builders, they would very happily give us all the marketing rights. We finalize one lump sum fixed deal with the builders and take over the marketing rights of the entire project. We can take our own time to market these properties & keep paying the rest of the money to the builders in installments as & when we sell and collect money from the prospective buyers. Here the returns are very lucrative as we can sell the property with a neat 25-50 % margin at the minimum.
Here the key is the ability to pay the initial 50% of the costs to the builders & take over the marketing rights and then later on do the marketing.
Flipping / Reselling properties by acquiring marketing rights can be lucrative for several reasons:
1. Access to off-market properties:
Acquiring marketing rights can give us access to off-market properties that may not be available to the general public. This can give us an advantage in acquiring properties at a lower price than the market value.
2. Reduced costs:
Acquiring marketing rights can also reduce our costs very significantly. Instead of spending money on making the changes or on giving it a facelift, we can directly handle the marketing, saving time and money.
3. Ability to control the sales process:
After acquiring the marketing rights, we can control the entire “Sale Process”, including the price and terms of the sale. This can allow us to negotiate a better deal and potentially sell the property for a higher price than the original builder would have been able to.
4. Reduced risk:
Acquiring marketing rights can also reduce the risk for us to a very great extent. We only have to market them effectively, increasing the chances of a lucrative sale.
5. Quick sale:
Finally, acquiring marketing rights can lead to quick sales. By building a good network of reselling agents all over the city, the property can be sold at a much faster pace.
Reselling properties by acquiring marketing rights can be lucrative due to access to off-market properties, ability to control the sales process, reduced risk, and potential for a quick sale.
5. Small Projects on a “Joint Venture Basis”
We construct small Apartment projects on a joint venture basis. The land will be owned by the Landlord & we enter into a joint venture development agreement on some fixed ratio of profit sharing with the landlord.
We select only small properties for development say 40×60 Square feet or a maximum of 50×80 Square feet sized properties. We can build 4 luxury flats in 40×60 ft size plots & about 8 medium luxury flats in 50×80 size plots and complete the project in maximum 9 months’ time. During construction time itself, we can sell our share, make good profits & exit.
Small projects on a joint venture (JV) basis can be more profitable for several reasons:
1. Lower investment requirement:
Small projects typically require less investment compared to larger projects, making them easily accessible to us. By pooling our financial resources with the landlords, we can take on smaller to medium projects that the landlord may not have been able to do alone.
2. Shared risk:
With a JV, the risk is shared with the landlord. This can help mitigate risks and minimize losses in time.
3. Access to new markets:
We can access new markets and expand our reach.
4. Potential for higher returns:
By pooling our financial resources, we can potentially generate higher returns compared to individual investments. This is especially true for smaller projects, where the investment required is lower and the potential for profit is higher.
Small projects on a joint venture basis can be more profitable due to the lower investment requirement, shared risk, access to new markets, and potential for higher return